Trading difficulties in the afternoon

Discussion in 'Strategy Development' started by bob2007, Dec 13, 2006.

  1. bob2007


    For the last 10 days, I've been able to win my daily target of $50 trading with a 200 share default up until approx. 11.15. I certainly know that 11.15 - 2 tends to be a slow period, but I havent' done very well after 2 p.m. either.

    But after that period, I end up losing all of the $50 and then another $50. During a day I average around 200 trades. Everyone at Swift Trade seems to tell me that I'm overtrading.

    I like to use charts, typically MACD, support and resistance.
    But things seem to look good even in a choppy markets. Do you guys just wait for futures inspired moves?
    My style is momentum trading and I trade the following stocks: BAC, C, JPM, HD. My daily stop loss is $50.

    Does anyone have remedies to this and other stocks to trade for a trainee?
  2. opm8


    You make 200 trades and end up with $50? I would say that is, by definition, overtrading.

    Unless you're married to this style of trading I'd recommend using a larger time frame chart like 3 or 5 minutes and aim for a bigger point target. It sounds like your risk-reward ratio is awful. You should really take an objective look at your style of trading and examine it from a business perspective. I think trading in the afternoon is the least of your worries. The good thing at least is that you're not bleeding money, keeping your losses to $50.

  3. I didn't know Swift allows trainees do momentum trading or even use charting. I guess their rebate game and trading low volatility stocks for a penny isn't working anymore with the ECN mergers. Momentum works during the open and close when the players are taking positions. During the slow middle part, you can try playing the Millenium game. What's your style, are you trading news momentum?

    I was doing 400+ trades a day as a trainee. For me the goal was to learn every single aspect of trade mechanics rather than making money, figuring out the latency on each ECN, how orders are routed etc. The more trades you do, the better you get a feel for the markets. My goals for being at swift were different than those of the other trainees, I never planned on staying at Swift, not for a 35% payout. For me they were more like Swift U. A place to learn and then move on to bigger and better things.
  4. Well if your style is momentum trading, you should be focused on trading from 9:40 to 11:30 only....After that the momentum starts to dry up rapidly..

  5. bob2007


    Thanks guys, I think your comments are spot on.

    opm8: "I'd recommend using a larger time frame chart like 3 or 5 minutes and aim for a bigger."

    For sure, I've definetly been leaning towards this. I also need to learn to hold my winners for a long time period. The thing I find hard about the 5 min. Charts is that I have 2 cent stop loss constraints.


    I think most of the traders are leaning towards momentum and longer term trades (b/c hybrid). I have yet to try the Millenium game, but I'll make an effort to do so.

    I don't really trade news, those moves are too fast for such a small stop loss. By momentum I mean that I mainly trade with the futures.

    "For me they were more like Swift U. A place to learn and then move on to bigger and better things."

    It's good to know that you are at a better place. Gives me hope. People are kinda leaving like flies these days. I'm only in my 3rd month now, but success is very far away.

    Kevin: "Well if your style is momentum trading, you should be focused on trading from 9:40 to 11:30 only....After that the momentum starts to dry up rapidly.."

    Ya for sure, but the thing is, wtf do I do for the afternoon. I get impatient and still get in.
  6. You could always go home at noon.

    One of the most consistent and profitable traders I know had the same problem and decided that he would only trade the morning session. He did that like 10 years ago. Though I haven't kept in touch with him, I know that he was a very good trader and even had most of the day free to boot!

    Just saying, there's no "right" way to trade except to make money. Since you're making money in the morning, perhaps increase your morning size and then go home?

    just a thought. :cool:
  7. Completely agree.

    When we have stats that show when we are most likely to lose money...

    Why fight the stats when we can exploit it too our advantage.

    Simply, if the p.m. trading session are usually losers while the a.m. trading session are usually winners...

    Trade the mornings only and then take the rest of the day off from the markets or go into simulator mode if the trading plan requires you to have contact with the market.

    Being involved in the late p.m. trading session gives some traders a better understanding of the following trading day a.m. price action regardless if that prior p.m. trading day was profitable or not.

    Next, you can then slowly begin to increase your position size for the morning trading session as long as there's not a violation of the money management rules.

    Next, if you get the problems resolved during the simulator trading of the p.m. trading session...

    Go back to trading with real money in the p.m. but with a dramatically reduced position size in comparison to the a.m. trading session.

    Simply, knowing when to trade and when not to trade is an edge.

    Just the same, knowing when to increase your position size and when to decrease your position size is another edge.

    These types of edges have an great impact on your overall trading results.

    (a.k.a. NihabaAshi) Japanese Candlestick term
  8. kwancy


    Afternoon, at least from 11:30-2 may not be a very good period of time for momentum trading unless big players step in and strong enough to tip the range (established in the first 1.0-1.5 hour). Some reading about market profile will help IMO.

    Maybe try to scalp instead of momentum trading for the lunch hour once you have confidence in a range on some stocks you are familiar with (and make sure big players are not stepping in). But letting go is not necessarily a bad idea and do not get obsessed with trading. Trading for the sake is to make money not for trading itself. Take a break when you need one
  9. Viper101


    Due to time zone differences, I can only trade 2-4pm ET until Daylight saving kicks on or out.

    I don't have time to do premarket work to create a watch list but I have access to several scanners.

    Does anyone know which movement data best represents patterns for potential set ups for late afternoon?

    e.g. Gainers/losers for the day???

    Anyone experimented with stock selection strategies for this trading time?